Republicans Hit Back at McCarthy, Claim He Subsidized Senate Race

Stung by the revelation that Republican Sen. Pete Wilson accepted campaign contributions exceeding federal limits, GOP leaders Monday portrayed his Democratic challenger, Leo T. McCarthy, as a similar sort of scofflaw.

California Republican Party Chairman Bob Naylor announced he had unearthed “circumstantial” evidence indicating that Lt. Gov. McCarthy subsidized his Senate campaign last year with money from his old lieutenant governor campaign fund.

And the Wilson campaign reiterated a charge that McCarthy accepted $11,473 in campaign funds over the federal limit of $1,000--the same law Wilson has acknowledged violating.

No Proof

When the dust had settled, the Republicans conceded they had no solid evidence proving that McCarthy used his lieutenant governor’s campaign fund to subsidize his Senate campaign.

And the Democratic camp produced documents indicating that McCarthy had already taken action to rectify the problem of $11,473 in excess contributions--in some cases by refunding money more than a year ago.

“Where’s the proof?” asked McCarthy spokesman Kam Kuwata. “Their charges have no basis in fact. They are made by somebody who is trying to cover up a violation.”

The charges of campaign law infractions began to fly a month ago when the McCarthy campaign accused Wilson of accepting $68,728 in “apparently illegal” donations that exceeded the $1,000 limit. The Democractic challenger’s campaign produced evidence of 97 violations of the federal election law.

Wilson, attributing the excess contributions to a computer problem, later returned about $30,000 of the money. Aides to Wilson said they would correct his campaign reports to show that much of the remaing money in question actually had come from the spouses of the initial donors listed.

On Monday, GOP chairman Naylor fired back at the Democrats, charging that McCarthy illegally subsidized his Senate campaign in the first half of 1987 by using money from his 1986 lieutenant governor’s campaign fund.

“It is one of the most blatant cross-subsidies I’ve ever encountered,” Naylor said in announcing that he would file a complaint with the Federal Elections Commission.

Naylor pointed out that in the first half of 1987, McCarthy’s lieutenant governor’s committee spent $195,000 and raised $455,000 in campaign contributions. In contrast, his Senate committee spent less--$85,000--and raised more--$754,000.

In addition, he noted, the lieutenant governor committee spent 18 times as much money for telephone service and six times as much money on legal services as the Senate campaign.

“We put these strong circumstantial facts together and are therefore alleging that Leo McCarthy had set up an illegal cross-subsidy and that the state campaign itself was in violation for failing to file as a federal committee, Naylor said.

In response, Kuwata pointed out that McCarthy did not declare his candidacy for the U.S. Senate until four months into the six-month period in question.

“On April 29, Leo McCarthy decided to run for the U.S. Senate,” Kuwata said. “Prior to that time, he had not made up his mind what he was going to do. When he was a non-candidate for the Senate, he didn’t have his Senate committee. There was no fund-raising operation to fund.”

The expenses incurred by the lieutenant governor committee resulted from fund-raising efforts to repay debts after McCarthy’s victory in November, 1986, Kuwata said. Both before and after declaring his candidacy for the Senate, McCarthy followed all state and federal election laws, he added.

“The people of California deserve to have someone in the state who obeys the law,” Kuwata said. “Right now, they have a lawbreaker, not a lawmaker.”

Naylor said he decided to file his complaint with the Federal Elections Commission after McCarthy chose to “stir the pot in this area” with his charges that Wilson accepted donations exceeding the amount allowed by law.

“Leo McCarthy was operating in kind of a holier-than-thou basis when he complained about (Wilson’s) multiple contributions,” Naylor said. “Those turned out to be in fact excessive contributions. There was a serious clerical problem in the Wilson campaign that they’ve acknowledged. . . . Now we have to look at how Leo McCarthy conducts his campaign.”